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Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

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Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#51

Post by [deleted] »

Ologn wrote: post #20
lobster2 wrote: post #19

Earlier quoted context omitted.

/biz/ has been great for me, I bought some MOONCOINS at 1 satoshi and I will sell next week at 5 sat at least once the current sell walls have been broken. There also is a very active community behind MOONCOIN. Why are you so dismissive of this new technology? Can you expand on your idea?

> Why are you so dismissive of this new technology? I'm skeptical of the idea that Bitcoins have value in the way commodities and other things which can be traded and exchanged have value. People might find some use for blockchain technology, but the speculation around the value of Bitcoins is ridiculous. It's a bubble like any other bubble. The notion that a Bitcoin can remain at a $2000 value is absurd. The current…

[deleted]

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#52

Post by wmf »

yamaneko wrote: post #43
jonnathanson wrote: post #23

Respectfully, I think a lot of comments on this topic are missing the point of the author's advice. Whether there is or is not a bubble, and if there is, how big that bubble might get, are irrelevant here. That's not what this article is about. First, the author assumes there is a bubble brewing. That's not his thesis; that's his background assumption. His thesis is that, assuming there is a bubble , you should do X,…

One of his advices is: > 2. Beware vanity metrics Can we tell if BitCoin and other cryptocurrencies has any vanity metrics? If so, what would that be? My uneducated guess would be how valuable the currency is in Dollars. The currency seems virtually inflated as we don't know how much of that would translate to real purchasing power. It doesn't seem that it would be possible to many people to sell it all out. Thus, wh…

I've seen number of transactions used as a vanity metric. This leads some people to "spend and rebuy" BTC to juice that.

Number of full nodes also looks like a vanity metric.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#53

Post by dmichulke »

coolspot wrote: post #48
chamza wrote: post #7

Internet companies during the dotcom bubble had market value of several trillion dollars. The total market cap of crypto-currency is still only ~$70 billion. I agree with the principle, but this boom is still pretty modest.

I think it is not absolute value what defines a bubble. It should be relative. E.g. perceived value of an asset compared to it's real value/revenue/growth.

To provide a context here - one of the key value propositions of BTC is real interest rate.

Cash real interest rate: 0% interest - 2% inflation through debasing currency = -2%

BTC real interest rate: 0% interest - 0% inflation = 0%

Note how this benefit of BTC is not bubbly by itself (growth expectation usually is - due to it being based on past growth)

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#54

Post by wmf »

1001101 wrote: post #22

Glad I sold my Amazon stock in 1999.

1999 wasn't a bad time to sell Amazon stock, actually, since it got punished in the bust and took years to return to 1999 levels. But Amazon is a huge exception because it was a real company and most dotcoms weren't.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#55

Post by rayuela »

stult wrote: post #36
cbanek wrote: post #13

Earlier quoted context omitted.

It's entirely possible it might be the catalyst for a large unwinding. Let me just set up a hypothetical scenario: Bitcoin prices begin to unwind (trigger: emotion? unknown unknown?). Chinese holders of bitcoin, who have been using them to get out of the yuan and avoiding capital regulations, start selling, accelerating the problem. Chinese WMPs (wealth management products) that may hold bitcoin start to default or g…

I'd say the causality is more likely to go in the opposite direction. A slowdown in China provokes a slowdown in capital flight via crypto which triggers the crash. It might actually be the canary in the coal mine of a global recession. Barring significant positive reform in Chinese capital markets as an alternative explanation, I am going to start getting scared when I see a crash in the Vancouver, BC real estate ma…

I think a slowdown in China would actually accelerate capital outflows and further inflate crytocurrency valuations.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#56

Post by corv »

learc83 wrote: post #46

If governments start to actually fear that their monopoly on creating currency is in danger, they will destroy crypto currency. Bitcoin may be decentralized, but they can go after currency converters. They can make holding it illegal. They can make mining it illegal. They can make trading it illegal. They can manipulate the market to crash the value of bitcoin with (to them) pocket change.

By the time governments fear that cryptocurrency could overtake fiat too many voters may already be in favor of keeping cryptoassets.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#57

Post by dmichulke »

Ologn wrote: post #35
FabHK wrote: post #32

Earlier quoted context omitted.

I agree with your skeptical sentiment, for the most part. However, dismissing Bitcoin as a bad commodity (because it cannot be used for anything) misses the mark. Instead, look at Bitcoin not as a commodity, but as money. Money (particularly paper money) has no intrinsic worth. What makes it valuable are its properties, and functions bestowed on it by consensus: counterfeiting resistance, fungibility, medium of excha…

If we look at the past 10,000 years of history - commodities are useful things, objects with utility. Currencies are commodities which people begin to favor for use in trading. Currencies are commodities which have properties that make them good currencies - they have properties such as uniformity, durability, divisibility, portability. This is why precious metals like gold have been favored as currencies through his…

Papiermark got printed. BTC gets ...?

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#58

Post by rayuela »

sanswork wrote: post #37
jpatokal wrote: post #24

Earlier quoted context omitted.

Bitcoins are saving this Venezuelan guy's family from starving. I'm pretty sure that qualifies as value: https://www.reddit.com/r/Bitcoin/comments/6d2w1b/bitcoin_is_... This is not to say that there isn't an absurd amount of hype and froth right now, but if nothing else cryptocurrencies will continue to serve a purpose for anybody who needs to send money outside capital controls.

If you read the thread you find out that the Venezuelan guy lives in the US has never done what he described and knows no one who has used it as he described. He gets called out by someone in Venezuela here https://www.reddit.com/r/Bitcoin/comments/6d2w1b/bitcoin_is_...

See this is why I really appreciate this community sometimes.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#59

Post by typednothing »

learc83 wrote: post #46

If governments start to actually fear that their monopoly on creating currency is in danger, they will destroy crypto currency. Bitcoin may be decentralized, but they can go after currency converters. They can make holding it illegal. They can make mining it illegal. They can make trading it illegal. They can manipulate the market to crash the value of bitcoin with (to them) pocket change.

> they can go after currency converters

Only in their own jurisdiction. The US already goes after those, but it won't help as long as other countries don't.

> They can make holding it illegal.

Unenforceable. Making the knowledge of a secret key illegal would simply be weird. Bitcoins have no physical incarnation. So, you cannot "hold" them in your hand.

> They can make mining it illegal.

Unenforceable. It is very easy to hide that a machine is mining. Furthermore, such machines can be located in any country of the world.

> They can make trading it illegal.

They already try to do that. It doesn't help.

> They can manipulate the market to crash the value of bitcoin with (to them) pocket change.

They would first have to buy up a lot of bitcoin in order to dump them and crash the market. While buying up the coins, they are pushing its value up. When selling them, they just go back to the point they came from. Hence, the strategy would be totally ineffective.

What's more, if governments attack the internet, people will discover that the reverse is much, much easier. Using the internet to orchestrate attacks against the government, is simply trivial to organize.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#60

Post by hl5 »

Twisell wrote: post #40
product50 wrote: post #14

Earlier quoted context omitted.

Do you have any idea what is going on here or are you ignoring away in bliss? This is as much a pyramid scheme as VC industry is in that early investors make disproportionate gains (and losses). Finding the right tokens to invest in is the challenge.

Well I will gladly change my mind anytime someone can provide a convincing argument against the "bitcoin pyramid scheme" that is nor an ad-hominem attack, neither a cryptic response like "value come from scarcity induced by the growing complexity of the arbitrary mathematical problem solving that require big amount of current tech silicium mostly running in a non-democratic country who don't care about power efficien…

Where are the victims?
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